Commodities Trading Outlook: Natural gas, crude oil futures

West Texas Intermediate crude fell on Thursday but held near the highest level in a month after a spike in US gasoline demand, coupled with persisting tension in eastern Ukraine. The oil market was however pressured by weak trade data from China, another sign of an economic slowdown in the world’s second-biggest consumer. Meanwhile, natural gas futures declined amid speculation a government report may show later today that US gas inventories rose for the first time since the beginning of the season.

On the New York Mercantile Exchange, WTI crude for delivery in May traded at $103.38 per barrel at 12:22 GMT, down 0.21% on the day. Prices shifted in a daily range between $103.15 and $103.81 a barrel, the strongest level in a month. The contract jumped 1% on Wednesday and settled the session at $103.60, the highest close since March 3rd.

Meanwhile on the ICE, Brent futures for settlement in the same month were down 0.54% at $107.40 per barrel, having varied in a daily range between $107.26 and $107.92 per barrel. The European crude benchmark added 0.3% on Wednesday and settled at $107.98, having touched a one-week high of $108.14. Brent’s premium to its US counterpart shrank to $4.26, down from Wednesday’s settlement at $4.38, which was the narrowest since September 19th.

Oil prices were pressured on Thursday after downbeat trade data from China added to previous signs of economic slowdown in the world’s second-biggest oil consumer.

However, a spike in US gasoline demand limited the losses, signaling a solid consumption ahead of the summer season.

US refiners supplied 8.81 billion barrels of gasoline per day in the four weeks through April 4th, the highest since January 3rd. Total motor gasoline supplies fell by 5.2 million barrels last week, sharply exceeding analysts’ projections for a 1-million decline. Distillate fuel inventories, which include heating oil and diesel, jumped by 0.2 million barrels, compared to projections to remain unchanged.

The oil market was also pushed higher amid simmering tensions between Russia and the West. Moscow dismissed fears in Kiev and the West over thousands of Russian troops amassed near its border to Ukraine as “groundless”, blaming Washington for spurring tension between the sides. This comes after U.S. Secretary of State John Kerry said on Tuesday that Russian agents have been fueling separatist disorder in eastern Ukraine.

Meanwhile, on the New York Mercantile Exchange, natural gas for delivery in May traded at $4.555 per million British thermal units at 12:22 GMT, down 0.69% on the day. Prices held in a daily range between $4.583 and $4.538 per mBtu. The energy source slid 1.4% last week, despite a government report showed much-larger-than the five-year average inventory drop.

The EIA weekly US gas storage report, due to be released at 14:30 GMT today, may show gas stockpiles rose by 5 billion cubic feet in the week ended April 4, capping the first increase for the season, according to Citi Futures in New York, cited by Bloomberg. That compares with a five-year average gain of 9 billion cubic feet for the comparable period.

Total gas held in US underground storage hubs fell to an 11-year seasonal low of 822 billion cubic feet as of March 28. US gas stockpiles were 51.6% below last year’s amount of 1.700 trillion cubic feet during the comparable week. The deficit to the five-year average widened to a record 54.7%, up from 50.8% a week earlier.